BP Plc, Europe’s second-largest oil company, will shut its solar power unit and quit the business entirely after 40 years because it’s become unprofitable.
“The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company,” Mike Petrucci, the unit’s chief executive officer, told staff in an internal letter last week.
The company will wind down the unit, BP Solar, over several months, he said. About 100 employees will be affected.
BP Solar is the latest victim in a solar market that is facing oversupply and price pressures since Asian manufacturers started ramping up. Crashing module prices helped tip three U.S. makers including Solyndra LLC into bankruptcy this year, and Solon SE, Germany’s first listed solar company, filed for insolvency last week.
BP Solar stopped most of its manufacturing in early 2009, closing several factories in Spain and shedding 480 jobs after the Spanish market froze, triggering the industry’s first period of strong oversupply. The company decided in July it would quit manufacturing entirely to focus on large projects. It no longer has manufacturing plants, Robert Wine, a spokesman for the London-based parent, said today by telephone.
The company plans to sell its stakes in the more than 158 megawatts in projects it has developed along with local partners in countries including Italy, Spain, Germany, Britain and the U.S.
The decision will not affect BP’s other alternative energy units, which include wind power and biofuels, Wine said.